Another “not making a profit” story

A nurse with whom I am acquainted told me the following story this morning. A relative of hers was recently diagnosed with breast cancer and a course of chemotherapy was advised. She has a high deductible insurance policy (good for her!) but just after the holidays is a little short on cash. After having received the news of her diagnosis and just having received her first round of chemo, she was told by the cancer treatment facility (owned by a LARGE health system in Oklahoma employing oncologists) that she must show up with no less than $495 at her next appointment or the deal was off: no more chemotherapy for her.

Now those of you that know me or read this blog know that I’m a fan of the free market. TANSTAAFL (there ain’t no such thing as a free lunch). Here at the Surgery Center of Oklahoma, we charge for what we do and we make a profit. We just happen to charge about a fifth as much as our hospital friends who claim to “not make a profit.” I continue to be amazed and shocked at the strong-arm money grubbing that characterizes these “not for profit” health systems (big hospitals). Come on! Seriously, this woman receives a diagnosis during the holidays of breast cancer and she is shoved against the wall for money? You think my characterization of this is unfair? This shakedown mentality isn’t limited to the poor, either. Just ask Garth Brooks.

There’s more. The oncologists, previously independent physicians with their own chemotherapy center, were free to make allowances for hardship prior to their sell out to the hospital for which they now work. The fees for their services are now higher than before by virtue of their affiliation with the “hospital system” and their old cancer treatment center is now abandoned. This is important to understand for those of you who think that physician-owned facilities represent a conflict of interest for the owners and that price gouging will be the inevitable result.

The opposite is actually true. Physicians who own their own facilities must also own and claim responsibility for the billing practices of the facility in addition to that of their private office. This “accountability of ownership,” as I like to call it (economists would refer to this as a lack of moral hazard, I think) represents a powerful deflationary effect on prices charged patients. Then there is the compassion factor. The physician-owned facility and its staff (including the billing and business staff) can’t aggressively shake patients down for money without tarnishing the image of the physician.

Here is how it works at our facility. A surgeon calls me and says, “I am seeing a child in my office that needs their tonsils out and the family has no way to pay. I am not going to charge them for doing the surgery. What kind of arrangement do you think we can make for them?” And I say,”If you are donating your time as the surgeon, I’ll donate my time as their anesthesiologist.” ”Furthermore, let’s not charge them for the facility, and if they are in a position to pay something later, then so be it.”

As owners we can do this. We can’t deny our link with our facility. We are proud to post our prices online for all to see. We are sure that as an outpatient surgical facility we provide a quality of care that is unmatched, at prices that none of our competitors can touch. And we are making a profit, treating folks like the nurse’s mother mentioned above, without engaging in the “not for profit” money shakedown that our hospital friends have unfortunately institutionalized.